January 9, 2014
- All bets are off once this virus starts spreading person to person…
- A pandemic that kills 300 million? Profitable insight beyond today’s bird flu headlines
- New year, old problem for Silver Eagles
- Is the worst over for gold stocks? Frank Holmes brings compelling evidence
- Sounding off on gold confiscation/windfall profits tax… a firsthand report from Obamacare’s front lines… The 5’s outlook affirmed on the funny pages… and more!
“Canada Reports First H5N1 Bird Flu Death in North America,” according to the newswires this morning.
The victim lived in Alberta and had recently visited Beijing. The Canadian health minister is playing down the risk of contagion. “The risk of getting H5N1 is very low. This is not the regular seasonal flu. This is an isolated case.”
True: The World Health Organization counts only 648 confirmed human cases worldwide over the last 10 years.
Alas, the bird flu story doesn’t end there…
“I predict an outbreak of a new flu called H7N9,” says Agora Financial’s new biotech guru Stephen Petranek. That’s the other virus that makes up the bird flu.
“This flu was detected in March of last year for the first time, and within about 60 days, more than 130 people were infected with this flu, all of them in China — and 44 of them died rather quickly. It’s a respiratory flu, and it’s incredibly deadly if you get it.”
The 5 was on the case from the get-go, seeking effective — and profitable — solutions. In April, we cited Laurie Garrett, health specialist at the Council on Foreign Relations and a consultant for the movie Contagion: “This could be how pandemics begin.” Affirmation came in June when we spotted a study in the medical journal Cell explaining how H7N9 required only a handful of mutations before reaching pandemic status.
Today’s South China Morning Post reports two newly confirmed H7N9 cases — one in Hong Kong, the other in Guangdong province. Hong Kong’s government is demanding more strict testing of poultry imports from the mainland.
“This is a very unusual strain of flu,” Stephen explains. Because it’s a bird flu, it does not transmit from human to human, as in Contagion.
Not yet, anyway.
For now, the only way you contract it is by contact with infected poultry. “But the more humans that are exposed to this virus,” he says, “the more likely it is that the virus will learn how to transmit itself from person to person instead of from bird to person.
“Once this flu does become transmissible from person to person, it will move around the world within about three weeks. Should that happen, we are likely to see something that has the potential of being worse than the Spanish flu of 1918, which killed 50 million people in a world that had about one-sixth of the population that the world has now.”
“So if you can imagine a flu where 300 million people die, you’re looking at least that type of scenario,” says Mr. Petranek. It’s a scenario he says has people at the U.S. Centers for Disease Control “very worried.
“We cannot really control very well whether this influenza develops the ability to move from person to person. What we can control is vaccines. But nobody is going to make millions, if not billions, of doses of vaccine on speculation.”
That is, only after an outbreak will someone start producing vaccines. But Stephen has identified a firm in the Breakthrough Technology Alert perfectly positioned to do just that. “They’ve developed an exclusive process for synthetically making vaccines.
“Traditional vaccine production requires weeks and weeks and weeks to produce a fairly limited number of doses. What you have to basically do is introduce the vaccine into eggs and then grow them in eggs. It’s a slow, laborious process.”
In contrast, this company “has developed a patented process for creating synthetic vaccines very, very quickly. I can guarantee you if this virus were to break out and start moving around the world that this is one of the companies the governments would be just pouring money into.”
[Ed. Note: Since Stephen came on board with us last fall, his recommendations are already up 6%… 35%… and 63%. For instant access to Breakthrough Technology Alert — no “long-winded presentation” to watch — click here.]
Another “meh” day for the big U.S. stock indexes. As we write midmorning, the Dow and the Nasdaq are slightly in the red, the S&P and Russell slightly in the green.
Several retail chains are issuing holiday sales reports today that are likewise “meh.” On the surface, they look positive. “But the gain,” Bloomberg informs us, “was fed by promotions and led by nondiscretionary goods, factors that point to limited consumer enthusiasm. Because of the negative effect of promotions on the bottom line, several chains have scaled back their earnings guidance.”
First-time unemployment claims also rang in “meh” this morning, at 330,000 — down from the week before (which was revised upward, wouldn’t you know). The number’s been so noisy the last two months it’s nigh meaningless… but with the Labor Department issuing its December jobs report tomorrow morning, traders are hanging onto every blip of a clue…
Gold is nearly unchanged from 24 hours ago; at last check, the bid was $1,227. Silver is likewise steady at $19.49
Another year, another supply squeeze for Silver Eagles. The U.S. Mint won’t start taking orders for the 2014 issue until next Monday. And supplies will still be rationed among the Mint’s “authorized purchasers,” as they were all last year, when sales set an annual record.
“The start of sales for the 2014-dated coins follows an extended gap in availability for the popular bullion product,” according to a report at Coin Update. “The U.S. Mint made their final weekly allocation of 2013-dated coins on Dec. 9, 2013.”
The five-week gap will likely drive a flurry of sales next week; roughly 3.5 million will be available, less than last year, when a sellout prompted a suspension of sales for the balance of January.
Last April, Mint officials said they were trying to find another supplier of blanks with which to make Silver Eagles, in addition to the three they have now. Evidently, they’ve had no luck.
Unless they’re not trying very hard…
“Can gold stocks break their losing streak and see a gain in 2014?” asks U.S. Global Investors chief Frank Holmes. “History says chances are good.”
Most of the major gold-stock indexes are down 60% from their 2011 highs. “But ditching this sector may not be the best action to take this year,” Frank cautions, “because miners are approaching the historical limits of multiyear declines.”
As evidence, Mr. Holmes points to the Philadelphia Gold & Silver Index — the XAU. “While gold stocks have a history of higher volatility compared with the overall U.S. market, consecutive periods of declines are rare. In 30 years, the XAU never had a losing streak of more than three years.”
Indeed, it’s happened only twice before in the 30-year history of the index. And the first time it happened, the XAU rallied 85% the year the losing streak was broken.
If you’re Canadian, and you’re alive, and the tax authorities think you’re dead… watch out.
From Canada.com: “The Canada Revenue Agency says it hasn’t yet been determined whether the CRA has a ‘systemic issue’ with wrongfully declaring taxpayers dead, despite briefing notes to the new minister identifying that issue and a handful of others as problems that need to be addressed.”
Hmmm… The CRA says it received word of 380,000 deaths during 2012, and “errors” occurred in 0.1% of the cases — around 380.
“At this time,” a CRA flack says, “it has not been determined that taxpayers erroneously declared as deceased is, in fact, a systemic issue. The Office of the Taxpayers’ Ombudsman is reviewing this situation and has not yet made a determination.”
Obviously, there’s no way to tell if there’s a large contingent of Canadians evading taxes by leading the bureaucrats to believe they’re dead… but if there is, it appears the jig is almost up.
“With all due respect to Jim Rickards,” a reader writes about a potential windfall profits tax on gold, “and what types of laws ‘have to go through Congress,’ the framed 1933 document on the wall behind me that proclaims the U.S. government’s last foray into gold confiscation does not say anything about Capitol Hill or acts of Congress.
“It states it is an ‘Executive Order,’ issued from ‘The White House,’ and gives U.S. citizens less than a month to surrender all their gold or face dire consequences. Considering that the author of that order, FDR (aka the Great Satan) and the tyrant Lincoln, who was fond of similar orders, are two of the greatest heroes of the current occupant of the White House, I wouldn’t count on having the luxury of either time or legality in dealing a with future confiscation.”
“Really?” another reader adds. “Obama could just issue an executive order. We could assume that at some point Congress would stand up to him, but in the name of national emergency the most powerful fascist in the U.S. will do whatever he wants (deems ‘necessary’).”
“For those concerned about gold confiscation,” chimes in a reader from your editor’s native Prairie State, “at least to this point in the People’s Socialist Thugocracy of Illinois you can buy gold in amounts we normal hoi polloi have money for (one or two ounces at a time) and you do not need to put your address down.
“Just scribble your name (or any name). I just bought recently, and my signature is 10 times worse than a drunken doctor writing a prescription barehanded in our recent -20 F global warming spate here.”
“I’ve been reading with interest throughout the holidays, and the subject of gold has certainly been interesting. I, again, agree with the one reader’s submission, that gold is ‘insurance.’ As far as the price collapsing to $1,000? Well, all right, sounds like a great buying opportunity!
“OK, let’s get all the conspiracy theories flowing. The big boss, Addison Wiggin, in his Daily Reckoning — and you mentioned it in The 5 — said that there is going to be a balancing of the books, so to speak, between all this gold paper trading and delivery of the actual metal. It sure seems to support a price spike when this all unravels. It also supports contentions that there is gold price manipulation.
“So the reader who warned that draconian, fascist states will confiscate our gold, I’m going to say what I said this summer and started a big stink about: Take it underground. If you read about the collapse of all these fascist states, they all have black market, underground economies. So little me conducting some bartering and gold trading will be just fine.
“Oh, if my ‘insurance’ is never needed — which I do hope — then I’ll have some bright shiny coins to give my grandkids! Oh, and quite possibly worth a small fortune!
“Thanks for my daily dose of The 5.”
“Yeah, you might get a single-payer system from Obamacare,” a reader writes after yesterday’s episode. “Many physicians and hospitals are opting out of Medicare/Medicaid now. Many of the doctors I have worked with have gone that route over the last 10 years.
“Medicaid and CHIP — the Children’s Health Insurance Program — do not pay enough to pay the receptionist’s salary or the office light bill. So doctors do not see those patients.
“Medicine is a business model — just like financial newsletters, Microsoft, GM, Alcoa or Merck. So the system will fragment more, ERs will get more crowded, quality of care will drop. Hard to see any doctor, hard to find one.
“I have been a primary care physician assistant, certified for 37 years, ER, family practice, average 80-120 hours a week for most of that time.. It is very sad what Congress and such are doing to us all.
“I will get good care for my spouse ,children and grandchildren one way or another in spite of the government. ‘Course, at my age, I might get too old for any care. That is coming too. They have it in Europe, Great Britain, Canada, Australia.. It is not spelled out, but it is there. If you have money, it will be much easier to get care. It pays to be as savvy and as successful as possible.”
The 5: We agree. Success in escaping Obamacare’s clutches starts with three little words.
“Goes back to your argument that the tea party and Occupy are the same thing,” writes our final contributor today, passing along an item from yesterday’s comics…
The 5: Heh.
Your editor owns a small stash of B.C. paperbacks from the late ’60s and ’70s, when the late Johnny Hart was in his prime and he had entries in “Wiley’s Dictionary” like:
Tuscaloosa (n.): The last thing an elephant wants to hear from an Italian dentist.
Cheers,
Dave Gonigam
The 5 Min. Forecast
P.S. Chalk up another big winner to start the year right: Steve Sarnoff urged readers of Options Hotline to sell their Wells Fargo calls this morning — for 90% gains in a month.
That’s on the heels of another big winner in December — 114% in a little over a month on Disney calls.
Yes, there’s more where that came from: “There’s always opportunity in options,” Steve is keen to remind us. Learn how to access Options Hotline — now in its 25th year of operation — at this link.